By Mary Ellen Flynn, Attorney
Many people mistakenly think that family members, especially siblings, are unlikely to go to court with them over inheritance disputes.
However, estate litigation between siblings is more common than you think. Statistically-speaking, of all inheritance disputes, 44% feature a dispute between siblings over the validity of a Will, which is more than disputes between parents and their children or other relatives. The reason is simple: a parent’s choice to distribute more or less of their estate to one child over another is a deeply personal decision. It often can represent a measure of a parent’s trust in their children, or lack thereof. It can also reflect how serious a parent truly is when communicating promises to their children.
The effects of inheritance disputes among siblings cannot be understated. Not only can such disputes lead to lengthy and expensive legal battles, but they can also cause irreversible damage to families: Of those who got into a sibling dispute, close to one-third claimed that the remaining members of their family stopped talking to each other as a result of the dispute.
If you are anticipating an inheritance dispute with one of your siblings, consider the following mitigation strategies to help minimize conflict:
1) Estate Planning can help prevent Estate Litigation
Often times inheritance disputes occur when there is a misunderstanding between siblings over what their parent intended to distribute to them upon their death. To preempt this, it is best to hire an Estate Planning lawyer who can sit down with your parent to discuss how they wish to distribute their estate. The lawyer will explain different estate planning strategies, such as whether to draft a Will or a Trust, as well as how to properly word certain bequests so that it is clear who is receiving what.
Another benefit of estate planning is that it prompts your parent to discuss issues of inheritance with you and your siblings before their death. This is especially the case if your parent wants to leave a child out of their Will, which is legally permissible.
2) Joint Ownership of a financial account
A Will covers property that is only in the name of your parent. However, shared property passes by operation of law to the joint-owner upon the death of one of the owners. If your parent intends you to have full ownership of a financial account, your parent might want to consider putting the account in the joint name of you and your parent. Of course, your parent should only do so after consulting with a lawyer because joint ownership of an account carries risks and might trigger unintended tax ramifications.
3) Appointing a Neutral Personal Representative or Trustee
The most common reason for sibling inheritance disputes is the appearance of bias or undue influence. If your parent anticipates there being inheritance disputes upon their death, they may wish to appoint a third-party Personal Representative or Trustee (if they set up a Trust) who is not related to those due to inherit or benefit from the estate. This is especially important to avoid any appearance of favoritism when administering the estate or Trust.
4) Write a Letter of Instruction
While a Letter of Instruction is not a legally binding document, as compared to a Will, it can serve as a helpful document in clarifying a parent’s wishes for how their property is to be distributed to their children. Writing such a letter may be especially helpful to communicate how they want items of great sentimental value to be handled.
5) Hire a Professional Mediator or use the Collaborative Process
An increasingly popular and effective option for resolving sibling probate disputes after a parent has died is to hire a professional mediator. A mediator is a trained, third-party neutral who facilitates discussion between disputing parties and helps guide the parties to an agreement that best represents both of their interests. Mediation is a less expensive, more efficient, and less contentious alternative to probate litigation. If you are not able to resolve an inheritance dispute, it may be preferable for you to hire a professional mediator prior to going to court. Another option is using the Collaborative Law Process where each side has a collaboratively-trained attorney.
6) Buy Out or Liquidation
If siblings who are at odds with each other inherit property jointly, one sibling may buy the other out. However, in many cases a sibling cannot afford to do so, especially if the shared property is large such as a personal residence or vacation property. In that case, the best option may be to liquidate the property and to divide the proceeds. Before selling any large assets, however, be sure to speak with a tax attorney or CPA to discuss the tax implications of the sale.
If you anticipate a family inheritance dispute, it is best to consult an Estate Planning attorney about your options. Please don’t hesitate to contact me so that we can figure out the best way to preempt any inheritance disputes that may arise in the event of your death or the death of a family member.
About Andalman & Flynn, P.C.: Founded in 1998 in downtown Silver Spring, Maryland, Andalman & Flynn has forged a distinguished reputation for legal excellence. The firm practices family law throughout Maryland and the District of Columbia, and represents individuals seeking disability benefits throughout the country. The firm focuses on cases that impact the rights of everyone, and are there for clients when responsive legal help is most critical. The firm has provided legal analysis on national and local television and radio, and their attorneys often testify before legislative bodies and are routinely invited to contribute to prominent legal publications. For more information about Andalman & Flynn, please visit the website at andalmanflynn.com or call 301.563.6685